Speaking at DC Fintech Week on October 15, Sarah Breeden addressed industry concerns over the Bank of England’s proposal to cap individual stablecoin holdings between £10,000 and £20,000 per person, and up to £10 million per business, for all systemic stablecoins in circulation.
First announced in late November, the proposed limits are intended to reduce financial stability risks from large, rapid outflows of deposits, which could disrupt access to credit for households and businesses if the system fails to adjust in time.
Critics argue that such restrictions could undermine the UK’s ambitions to become a global hub for digital assets, warning that innovation and investment may migrate to more accommodating jurisdictions. The UK would be the only major economy considering such a move.
Breeden emphasized, however, that the restrictions are temporary. The Bank seeks to leverage stablecoins for both retail and wholesale payments.
“We want to support such a role for stablecoins as part of a multi-money system. While proposals for stablecoin use in these areas have yet to gain traction, we know from other tech innovations how rapidly new products can grow—especially where network effects are large and existing user bases are significant,” Breeden said.
She explained that the measures are designed to allow the structure of real-economy financing to adjust gradually to stablecoins, while enabling the Bank to monitor adoption and assess potential risks to the financial system.
“We would expect to remove the limits once we see that the transition no longer threatens the provision of finance to the real economy,” she added.
Developing a regulatory framework for stablecoins
Breeden also noted that regulating the fast-evolving stablecoin market presents challenges, but the Bank is working to establish a forward-looking regime.
“This framework will help stablecoin firms innovate responsibly, providing better payment services while managing financial, operational, and conduct risks,” she said.
The Bank plans to launch a consultation before the end of 2025 to gather feedback on the proposed holding limits, potential exemptions for larger businesses, and practical implementation strategies.
“We also intend to seek input on how best to apply these limits in practice, as well as other approaches to achieve our objectives,” Breeden said.
Bank of England Governor Andrew Bailey, a long-time crypto skeptic, has previously warned that stablecoins could threaten the fundamental nature of money if not properly regulated.
